Author explains boom bust cycles in AI fiber and railways

The author argues that transformative technologies like AI, fiber optics, and early railways often follow a boom-and-bust cycle where massive capital investment creates an oversupply that collapses prices and harms early producers while ultimately benefiting consumers. Examining historical parallels from airlines, railroads, and the dot-com bandwidth boom, the essay suggests that while demand is often real and explosive, companies frequently ignore competitive dynamics and overcommit to capacity. Consequently, most early capital is destroyed, and durable competitive advantages or moats are required for businesses to survive long-term. Open article →